When James and Melissa Stephenson were handed the keys to Mount Gambier’s old prison in 2010, they closed the doors for 18 months.

“It was horrible, it really was … It just felt really sad and heavy,” Mr Stephenson said.

In the decade prior to them moving in, the heritage-listed site had been a halfway house and hostel for the town’s homeless population.

“Every square metre of the jail was used to house junk, [there was] animal faeces, there was a lot of drug use in here,” Mrs Stephenson said.

The early days of The Old Mount Gambier Gaol.(Supplied: City of Mount Gambier Council)

Nevertheless, the Stephensons believed they could transform the premises into a successful hotel as well as a beautiful family home in which to raise their three children, Caine, Ari and Lulah.

In the years since, they have converted the 150-year-old prison into Australia’s only full-time boutique jail accommodation, attracted visitors from all over the world, and hosted musical acts including Suzi Quatro, Jimmy Barnes and The Hilltop Hoods.

But not without opposition.

The one-level prison, with its open-air courtyards, operated between 1886 and 1995.(ABC South East SA: Bec Whetham)

A punishing start

The Stephensons were living in Queensland when they returned home to Mount Gambier and discovered that the jail was up for grabs.

“[We wanted] to turn it into a tourism destination, not only for our community but Australia-wide and internationally,” Mr Stephenson said.

When they beat 70 other businesses for the tender, the response they received was far from warm.

“The way the media had spun it was ‘this couple coming down from the Gold Coast’, they didn’t say it’s two homegrown kids coming home to do their best,” Mrs Stephenson said.

There were still people living in The Old Mount Gambier Gaol when the Stephenson family moved in.(ABC South East SA: Bec Whetham)

On top of that, they spent the first few months living in a cell waiting for the previous tenants to leave.

“I think they stayed here for four months cohabiting with us on our lease. It was tough,” Mrs Stephenson said.

To give the community a sense of what they were working with, they opened some corners of the jail to the public.

The prison had seen better days when the Stephensons took over in 2010.(Supplied: Melissa Stephenson)

Selling their vision for the prison

The fact that few believed in their vision for the old limestone-and-dolomite premises was a massive motivator for the couple, especially James.

“Everyone just said, ‘You’re crazy, this place is an absolute dive’,” Mr Stephenson said.

The old exercise yard at the former prison features a tranquil, bucolic scene painted by an inmate.(ABC South East SA: Bec Whetham)

But with James having visited more than 70 countries and having worked in tourism and hospitality around the world, and with Melissa’s background in Australian travel and community work, the council agreed to give them a shot.

“When me and Melissa first looked at starting the jail, we did an operational plan, we did a business plan, we did a capital plan, we did visions,” Mr Stephenson said.

“The council looked at our visions and said, ‘We’ve got to give you guys a go’.”

Glimpses of the past were retained as the Stephensons renovated the property.(ABC South East SA: Bec Whetham)

Shaking off the shadows

It took a long time to get the jail ready for guests.

“It was really important for us, because it is our family home … to have that positive feeling,” Mr Stephenson.

Early on they had local Boandik people conduct multiple Aboriginal smoking ceremonies, painted walls with thick layers of white paint and planted hundreds of native trees to brighten up the place.

The original jail cells are now used as bedrooms in the hotel — which means the rooms are small.(ABC South East SA: Bec Whetham)

The hotel now sleeps 68 people in a series of self-contained family suites, twin rooms and dorm rooms for school groups.

Being quite small, the rooms can only fit double beds — and as the property is heritage-listed, the Stephensons were unable to alter any room sizes.

“For a while there it was a bit frustrating for us because we were growing and there were some things we couldn’t do,” Ms Stephenson said.

“But we’ve come to accept that and just work around it and since we have, it’s just flowed and it’s actually quite easy.”

The converted chapel is used as a common space for hotel guests.(ABC South East SA: Bec Whetham)

One of the common rooms for use by hotel guests is the converted prison chapel, which retains a large wooden crucifix, but also features welcoming couches, historic photographs and interesting artwork.

Plenty of history, but no ghosts

But if you’re hoping to bump into a ghost or two, you might be disappointed.

“We get asked if it’s haunted, but for me, personally, being haunted means spirits causing problems,” Mrs Stephenson said.

The transformation process included a lot of time incorporating greenery into the prison to liven it up.(ABC South East SA: Bec Whetham)

Mrs Stephenson said getting the balance right between prison and boutique hotel was an ongoing process.

“Some people think it’s way too much like a jail — other people think we’ve taken away aspects of the jail,” she said.

“At the moment, we’re right in the middle of turning all the history that we’ve been finding into decor so it’s more and more history.”

Mel Stephenson does most of the designing.(ABC South East SA: Bec Whetham)

Living in jail a ‘unique adventure’

The Stephensons have worked hard to separate work from family life.

“We all love living in the gaol. It’s such a unique adventure,” Mrs Stephenson said.

“It took us a long time to work out how to live here and set boundaries around our personal space.

James and Mel Stephenson with their children, Caine, Ari and Lulah.(Supplied: Melissa Stephenson)

“People [used to] just walk into our house thinking it was the entrance. No ill-will there but it was just such an invasion of space.

“There are a couple of doors that we have shut down now, we don’t open them anymore.”

They scrapped the 24-hour check-in too, changing it to times that suit their family.

The original jail keeper’s house where the Stephenson family lives.(Supplied: The Old Mount Gambier Gaol)

An escape from prison life

A few years back the couple bought a shack at Southend, an isolated beach 35 minutes from the prison.

“One of us can tag team, go down to the beach for the night and come back in the morning,” Mr Stephenson said.

Many of the guests come to tour the area’s caves and sinkholes.(ABC South East SA: Bec Whetham)

It was an important getaway during the worst of last year’s COVID situation. Prior to the pandemic, the hotel was the busiest it had ever been.

“Overnight, same with everyone, it stopped,” Mr Stephenson said.

They took their kids out of school and bunkered down at the shack for a few months.

The Stephensons say living in the old prison is a “unique adventure”.(ABC South East SA: Bec Whetham)

Since reopening in September, the couple describe having a “new lease on life”.

“So many people in business don’t get two or three months [off[, they work seven days a week for 10 years. We certainly did that,” Mr Stephenson said.

“We just felt really grateful that we had that opportunity to sit and go through all that and decide again, ‘Is this what we really want?'” Mrs Stephenson said.

They both decided it was.